To be terrified how low my chances are?

[Undercity]

I earn around £40,000p.a. on a single salary and am considering a fixer-upper property around the £160,000 mark, with a 10% deposit.

I have just completed my credit check and my score is just under 80%, despite never having had (or needed) credit and never having fallen behind on any of my payments. I can afford my rent and to save an extra £500 pcm comfortably despite all my other outgoings.

And yet, according to the credit check website, my chances of being accepted for a mortgage I'd need are low with any of the bigger lenders. Even my own bank that I've been with for well over a decade.

If someone in my position will, at best, struggle to get a relatively low mortgage with monthly repayments over £100 lower than my rent, how would others who are less well off?

I know the website can only give an estimate, but I really can't afford to go higher and that property would need a LOT of work in terms of decorating etc., which I could easily do month to month, but it's not like I want to buy top range. Am I going to be renting forever due to being single?

Just be warned that taking out a credit card can lower your score for six months. I did it to improve score and it made it worse. Luckily not enough to not get a mortgage but I was really worried I’d fucked up.

Why don't you just get a credit card? The fact you've never had credit isn't seen as a good thing, it's probably counting against you.

If I was serious I'd go into the bank and start the consultation.* The decision engine calls take into consideration a lot more factors than what the credit score company website has info about. Most of the time it is not the same decision engine behind the 2.
Some general items that are taken into consideration (this is public info, but quite specific i guess) and some sure knock out criteria:

• are you on any blacklists? Fraud, terrorist... :)
• DTI (debt to income ratio) - this can vary from 35% to 70% per financial institution, based on your other datapoints like employer, employment type, marital status, etc..... Mortgage tends to be on the lower side, unsecured cash loan more on the top side or above
• behaviour score - this is always the big secret (which I am not privy to unfortunately :)), but common sense applied: card usage (frequency, amount, type of usage), your past willingness for bundle deals (how easy is it to x-sell or upsell to you...but it could also be the age of your dog)
• liabilities/obligations at same and/or other banks (credit bureau check -whatever it is called in each country- uk customer facing is experian I think, and they only give back a score. Banks are likely to get back more detailed info and have diff thresholds than just based on the final score.
• expenses (obv)
• income (obv)

Yes, there are certain criteria that have to be above a threshold to not be hard rejected, but those are quite harsh.
Most financial institutions have the soft rejection and/or challenge route - here the bank will come back to you and negotiate what can be done for you to get the moeny (co-applicant, co-debtor, guarantor, additional collateral, salary transfer are the most common)

(I have worked on mortgage lending process and decision engine projects in the near past.)

European bank generic process, guessing uk won't be that much different as it was regulated by ECB until not long ago:
consultation where all data is gathered (10-30min) run decision engine call -- give at least 5 offers (this varies by country/bank policy). These are preliminary, non-binding offers.
In or before the decision engine call the system is set up to identify the applicant by some form of unique identificator (usually it is the ID in EU countries) and it goes to all relevant systems: credit bureau for liabilities, salary info if there is a central salary register or tax office interface,.... have no idea what are available here in the UK really.

In more and more countries if the mobile app or the online version (not public website, but where you have to log in) has a function to start an application it is most likely plugged into the bank's general decision engine. It means that you can fill out the form whenever you feel like it, don't have to go anywhere and it will be pretty accurate for your bank.

2 general thoughts:

1. Any and every bank will give a better offer for existing to bank clients, but I guess that is logical.
2. big banks are usually regulated by ECB regulation which can be pretty harsh. Smaller banks are regulated by the local national bank which tends to be more lenient. Although the UK is no longer EU, so no ECB involvement any more, my guess would be that big banks won't have had ample time/resource/willingness to change their habits, processes and fraud rules yet. If you have time try "shopping" around. See if there are any institutions that give you an offer and then assess what that offer is. If most of them actually give you an offer don't be afraid to challenge it (the other bank will give me 0.2bps lower, etc... ). Surprisingly, a lot can be achieved like this :)

(this is still not insider info, just experience: negotiated 15% off frm 2 new cars I bought, negotiated 0.2bps down on car finance, etc... :) I am not afraid to ask)